\u3000\u3 Bohai Water Industry Co.Ltd(000605) 123 Wuxi Paike New Materials Technology Co.Ltd(605123) )
Event: Wuxi Paike New Materials Technology Co.Ltd(605123) released the 2021 annual report, and achieved an operating revenue of 1.733 billion yuan in 2021, a year-on-year increase of + 68.6%; The net profit attributable to the parent company was 304 million yuan, a year-on-year increase of + 82.6%; Deducting the net profit not attributable to the parent company of RMB 286 million, a year-on-year increase of + 91.1%. The company closely followed the pace of national strategy and actively explored the market, and continued to achieve rapid development in 2021.
Rapid and large-scale aerospace business: the company is the core supplier of ring forgings in China's aerospace and other high-end fields. Since 2013, it has become a supporting enterprise for many types of high-end products such as aeroengines, launch vehicles, missiles and gas turbines. In recent years, the company's revenue in the aerospace field has maintained a high growth rate. In 2021, the revenue of Aerospace Forgings reached nearly 716 million yuan, a year-on-year increase of + 117.8%, and the proportion in the total revenue increased from 16% in 2017 to 41%. The gross profit margin of Aerospace Forgings of the company is significantly higher than that of civil products. In 2021, the gross profit margin of Aerospace Forgings reached 46.2%, an increase of 3.9 percentage points year-on-year, resulting in a significant increase in performance.
Keep up with customer demand and promote market expansion: the company continues to develop around aviation, aerospace, nuclear power, wind power and alternative imports. In terms of aviation business, RORO and Ge have continuously promoted their orders, launched the first article development of multiple part numbers, and received some batch production orders; In terms of aerospace business, we carried out research and development around the needs of major equipment such as missiles and launch vehicles, successfully passed the supplier review of an Institute of Aerospace Hi-Tech Holding Group Co.Ltd(000901) group, and participated in the docking and landing of the development of a new generation of manned rocket projects. In the nuclear power market, the company has successfully obtained the civil nuclear safety production license; In terms of wind power market, the company has successfully obtained the CE certification of wind power and will increase efforts to invest in the development of wind power products.
During this period, the cost was well controlled and the R & D investment was continuously increased: the company continued to increase the R & D investment in aerospace, new energy and other products throughout the year, with the R & D cost of 78.79 million yuan, a year-on-year increase of + 83.6%, accounting for 4.6% of the total revenue. At the same time, the results of lean management, cost reduction and efficiency increase were remarkable, and the rates of sales, management and financial expenses decreased by 0.5 percentage points, 1 percentage point and 0.2 percentage points respectively compared with the same period last year; The net interest rate was 17.54%, an increase of 1.3 percentage points over the same period last year.
Investment suggestion: it is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 4.3/5.8/770 million yuan respectively, and the corresponding PE of the current stock price is 35 / 26 / 20 times. The company is the core supplier of ring forgings in the high-end field of China's aerospace industry, with stable business performance and steady increase in profit margin. With sufficient orders and guaranteed production capacity, the "overweight" rating was maintained.
Risk warning: the risk that the downstream demand growth is less than expected; Risk of price fluctuation of raw materials; The risk of new product R & D and market expansion falling short of expectations.
